The action plan for stake sales in public sector enterprises (PSUs) could be in for a reboot if the Bharatiya Janata Party (BJP) forms the government with Narendra Modi at the helm.

While the party’s prime ministerial candidate Narendra Modi is known for his pro-PSU stance in Gujarat, senior BJP leaders said that a decision on the disinvestment strategy would be taken ‘if and when’ the party is voted to power.

While declining to comment on what kind of a disinvestment strategy would be followed by the party, senior BJP leader and former finance minister Yashwant Sinha said he would recommend returning to the policy under the NDA regime. “The disinvestment policy under the Vajpayee government was entirely upfront and transparent,” said Sinha.

Significantly, the 52-page BJP manifesto that was released last month does not refer to the issue of stake sales in public sector enterprises.

“Under the policy then, we tried to revive PSUs and make them competitive to survive in market conditions. Only if these conditions were not met, did we dispose of the undertaking to get the best possible prices through an auction with the assurance that the management will be with the buyer,” he told The Indian Express.

This would be a shift from the UPA’s disinvestment strategy that looks to have a minimum public listing of 10 per cent for all listed CPSEs and listing of all unlisted profitable PSUs while retaining majority stake and management in these firms. A revised disinvestment plan for Central PSUs under a Modi-led government was also predicted by brokerage firm CLSA recently.

“A look into the financial and stock performances of Gujarat PSUs suggest better days ahead for the larger Central government PSUs should Modi become the next prime minister. Modi has recently stated that he believes PSU performance can be improved by empowering the management,” the CLSA report stated, adding that successful turnaround stories from Gujarat such as GSFC and GSPC raises hopes for the likes of MTNL and public sector banks.

However, the Interim Budget has counted heavily on disinvestment proceeds that are estimated at over Rs 36,000 crore in FY15 to keep the fiscal deficit in check at 4.1 per cent of the GDP.

“Stake sales in public sector firms have been a big source of revenue for the government in the last few years. If there is a re-think on disinvestment by the new government, alternate revenue raising measures will have to be looked into for funding the fiscal deficit,” said a senior government official.

The NDA government, between 1998 and 2004, went ahead with strategic sales of a number of loss-making PSUs including Bharat Aluminium, Hindustan Zinc, some ITDC hotels. According to the CLSA report, while the NDA government raised Rs 33,000 crore ($5.5 billion) through stake sales, the UPA has raised Rs 1.26 lakh crore ($21 billion) in its tenure at the Centre.